Cost of sourcing coal for industry has skyrocketed with the premium being paid by sectors such as cement, steel or aluminium crossing 100% over prices paid by the power sector. Diversion of coal meant for these private sectors to power plants continues forcing industry to buy costly coal from auctions where prices were more than double or about 102% of the notified prices paid by the power sector in September, according to data submitted by Coal India to the ministry.
The situation was much better in the previous year when the premium was 67%. Every year, Coal India supplies about 90% of its coal at notified prices to mostly power plants and specified other sectors while the balance 10% is sold via e-auctions which largely reflects current demand-supply scenario, or how badly the private sector need coal supplies.
During September 2.58 million tonne (mt) of coal was put for spot-e-auction at prices which, on average, was sold at 102% over notified prices. This compares with 3.05 mt in September of 2017, which was sold through spot e-auction at 67% premium over Coal India’s fixed notified prices. Read More